Donation of shares in a public limited company (SA)

Verified 09 September 2026 - Entreprendre Service Public / (Prime Minister)

The gift of shares consists for a partner (the donor) in transferring to a beneficiary (the donee) the rights he holds in the share capital of the company. This operation must comply with a number of steps and conditions.

A donation of shares can be made in different ways and can even be made by means of a manual donation.

Donation established by an act

When the donation is recorded in an act, it must be authentic. A donation under private seing is therefore not possible.

If the donee is not heir apparent of the donor, only a simple act of donation can be considered.

On the other hand, if the donation is granted to a presumed heir of the donor, it can then take the form of a simple donation or of a donation-sharing. They are both donations, i.e. transmissions during the donor's lifetime (unlike a legacy for example).

Example :

When a donor with two children donates his shares to a brother or an uncle, only the simple donation is possible. The children of the donor are indeed heirs presumption because they are online direct. As such, they have priority over online heirs collateral (brothers and sisters, uncles and aunts, nephews and nieces, cousins...).)

Where possible, the donation-sharing includes certain advantages and particularities, in particular :

  • It constitutes an early division of the donor's estate, during his lifetime: the assets are thus allocated in advance. This limits possible conflicts linked to an indivision and facilitates the settlement of the estate upon the death of the donor
  • The attribution to the donee is final and may not be the subject of report when settling the donor's estate
  • It is a hybrid act comprising a donation and a sharing but this sharing is generally exempt from taxation (sharing rights). Only the donation is subject to the donation rights, thus allowing a fiscal economy.

Donation-sharing, however, involves some constraints :

  • It can only be granted for the benefit of heirs presumption the donor, or the children of such heirs
  • It is not possible to donate property undivided by means of a donation-sharing
  • It is preferable to make a donation-sharing egalitarianin which each heir-apparent of the donor (usually his or her children) receives property of equal value. For example, a person who does not receive the shares may receive a sum of money of the same amount.
Donation not recognized by an act

A donation of shares may be valid even without any written act confirming it.

In this case, the donation is qualified as manual donation.

The transfer then takes place by simply transferring the donor's account to the donee's account into the business' books.

Although it is valid, the donation of shares without writing does not allow to provide for certain usual stipulations in terms of donation (such as dismemberment, the addition of obligations to be borne by the donee, or special arrangements for estate report). It is then possible to provide a deputy pact, i.e. a document drawn up subsequently and specifying the conditions for manual donation.

The approval clause controls the entry of a new shareholder in the business by submitting the donation of shares to theprior agreement of the business. This clause is only possible in certain businesses.

unlisted business

In a SA no listed (whose securities are not admitted on a regulated market), the actions are freely transferable but the articles of association may make a donation conditional on approval partners or provide other clauses framing this operation.

On the other hand, this approval is inapplicable to gifts made between spouses, to an ascendant or descendant (unless this approval is intended to reserve the shares for employees).

listed business

In a SA listed (whose securities are admitted on a regulated market) donations of shares may not be subject to approval. A clause in the statutes requiring such authorization is prohibited.

1Check whether an approval clause is provided for

Only the statutes of a SA do not listed may include an approval clause.

In case of donation, the application for approval is then notified to the business or to the President.

Violation of the approval clause results in the invalidity of the donation.

2Implement the approval procedure

Where an approval clause is provided for in the statutes, the draft donation must be notified to the business (by LRAR or service) i.e. to one of its legal representatives (Chairman of the Board of Directors, Chief Executive Officer...).)

The notification shall indicate the name, surname and address of the donee, the number of shares concerned by the donation and their value.

The competent body designated by the statutes shall then decide on the application for authorization in accordance with the statutes, in particular as regards majority rules.

At the end of the procedure, approval may be granted or refused.

Approval shall be granted

Approval may result either from notification by the business, i.e. a lack of decision within 3 months of the application for approval (it is then a accreditation unspoken).

When approval is granted, the donation can be made.

The approval decision must be retained in order to be able to justify compliance with the procedure. In practice, it is generally observed in a minutes of general meeting or in any other document provided for in the articles of association.

Approval is refused

Where the approval is denied, the consequences shall be those provided for in the statutes.

These may in particular provide that the shares will be acquired by one or more partners, by a third party designated or, with the consent of the donor, by the business itself under the conditions prescribed by law.

If the repurchase has not taken place within 3 months of the notification of the refusal, then the donation is considered authorized (accreditation unspoken).

The repurchase price shall be fixed by mutual agreement between the parties. In the event of disagreement, the value of the shares shall be determined by an expert appointed in accordance with the applicable regulations.

3Check other statutory clauses

The articles of association may provide for other clauses governing the donation of shares. Before carrying out such a transmission, it is therefore necessary to check whether the statutes contain any of the following clauses.

1) Pre-emption clause

The pre-emption clause (or « preference clause ») grants one or more partners a priority right to acquire shares being the subject of the donation.

In a SA, such a clause is generally provided for in a shareholders' agreement. The actions must then be proposed as a priority to the beneficiary of the clausein accordance with the terms of the covenant, before being given or transferred to another person.

Infringement of a pre-emption clause does not, in principle, render the donation invalid. On the other hand, it may incur the liability of the donor and give rise to the payment of damages and interest.

2) Inalienability clause

The inalienable clause prohibits the donation of shares for a fixed period, which may not exceed 10 years.

The statutes shall specify in particular the starting point and the duration of that prohibition. Upon its expiry, the shares may be given, subject to compliance with any other applicable statutory clauses.

Please note

This clause may be adopted or amended only at theunanimity associates.

It may be expected that inalienability will impact only the shares of certain partners named in the articles of association (e.g. members considered to be vital to the sustainability of the business). It is also possible to limit inalienability to a certain proportion of the social rights of each partner, so that the share exceeding this proportion remains transferable.

Where the donation of shares is recorded in a deed, it may take the form of a authentic act (notarial) or an act under private seing.

Donation by authentic deed

When the donation is made in the form authentic, the notary in charge of drafting the notarial act will incorporate all the essential information on its validity:

  • Names of parties
  • Identity of the business
  • Number and designation of actions given (if numbered)
  • Value of shares
  • Details concerning the approval of partners
Donation by private deed

The parties have the possibility to draw up a deed of donation under private seing, i.e. without going through a notary.

Just like an authentic deed, the donation under private seal makes it possible to formalize their agreement, specify the conditions, and also to retain one evidence.

It must include the mandatory particulars following:

  • Names of parties
  • Identity of the business (company name, share capital, address of the registered office, etc.)
  • Number and designation of shares transferred (if numbered)
  • Valuation of securities
  • Details of the approval of the partners, if any

The private deed is generally drawn up in as many copies as there are parties to the deed so that each of them can keep one.

Each copy must be signed by the parties.

Please note

The act can perfectly be established in electronic form provided that the method used is reliable. In particular, it must guarantee the identity of the signatory, or it must be possible to retain conditions that preserve the integrity of the signatory.

To be valid, the electronic signature shall:

  • Be uniquely attached to its signatory.
  • Have been created using electronic signature creation data that the signatory can, with a high level of trust, use under its exclusive control.
  • Be linked to the data associated with this signature in such a way that any subsequent modification of the data is detectable.

Warning  

The scanned signature and affixed to a document does not make it possible to identify the author with certainty. This signature is valid but can be challenged before the judges by one of the parties to the contract who would like, for example, to cancel the assignment.

For learn more about the electronic signature :

Electronic signature

France Num

Pour en savoir plus

A donation of shares involves the transmission of a active, but also of a passive (this corresponds to the debts of the company). The donor thus assigns his rights but also his obligations.

In this context, it is possible to provide for contractual warranty clauses obliging the donor to guarantee the accuracy of all information provided during the donation. Such a clause obliges the company to compensate for any error that may have led to a decrease in the value of the shares given.

Please note

Even in case of transmission without price (a donation), the valuation of shares is an important parameter because it determines for example the amount of any donation rights.

Beneficiary of guarantee

Although a guarantee clause generally benefits the donee, it is not the only one who can benefit from it: 3 people can indeed claim compensation under a guarantee clause:

  • The donee
  • The business the securities of which are transferred (the business could thus act under this clause and deduct from its outcome the costs associated with any legal proceedings
  • One creditor business (for example, the guarantee clause may stipulate that compensation consists in paying the creditor directly if a debt was not included in the company accounts at the time of the donation).

Purpose of the guarantee

For example, the donor may provide a contractual guarantee that the declared assets or liabilities are accurate, that the claims identified as recoverable are accurate, or that the social security contributions due have been paid.

The warranty may cover all information concerning the company and which may have a impact on the valuation of securities transferred : parent company accounts, customers and suppliers, volume of payroll expenses, possible equity investments in other companies, ongoing litigation...

Guarantee of liabilities

In the event of the transfer of shares, the beneficiary bears a major risk. Indeed, a liability may arise that originates in an event whose cause is earlier the transfer (e.g. a fine related to a tax adjustment in progress at the time of the donation), and with the consequence that decrease the value of the securities received.

To be valid, a liability guarantee clause must meet all of the following conditions:

  • It cannot guarantee that debts (regardless of their origin, legal or contractual)
  • The secured debt must be prior to the transfer, or prior to the date on which the reference accounts were drawn up (those from which the value of the securities was contractually determined)
  • The debt must not be included in the accounts to which the donee has had access (even if the donee has been aware of the debt). However, it is possible to provide that the mere knowledge of a debt not entered in the accounts prevents the donee from activating the guarantee.
Asset Guarantee

Such a guarantee allows the donee to be compensated when the registered assets declared at the time of the donation were overvalued due to a cause earlier on transmission, if this error results in a decrease in the value of the securities received.

Examples include an asset that is incorrectly valued on the balance sheet, a rejection by the tax authorities (after the transfer), a tax credit entered in the business' accounts at the time of the donation, or any asset that is on the balance sheet but does not actually exist.

To be valid, the asset guarantee clause must relate to an asset of the business, and guarantee a decrease in assets whose origin is an event prior to the transfer.

Drafting of a guarantee clause

The drafting of the guarantee clause directly conditions its efficiency. The inclusion of certain information is strongly recommended, including the following:

  • Reference date : the date before which the cause of a decrease in the asset or an increase in the liability is considered to have occurred prior to the donation. This date is often the date of transmission, but not exclusively (for example, the parties may decide that the reference date is the date on which the parent company accounts allowing the valuation of the securities were drawn up).
  • Beneficiary of guarantee : the secured person may be the donee, the business or even a creditor
  • Duration of the clause: it may vary in practice between a few months or several years
  • Calculation compensation: the proportion of the decrease in liabilities or assets that the guarantor (the donor) undertakes to assume. This proportion may decrease over time
  • Floor amount guarantee: the amount of damage from which the guarantee may be invoked
  • Ceiling amount compensation: the maximum amount of compensation that the donor undertakes to pay. Beyond this amount, the damage is not covered by the guarantee clause
  • Implementing arrangements : this information specifies how the guarantee can be activated by its beneficiary (justification of the liability, methods of sending the claim for compensation...))

Transmission of guarantees in the event of a donation

In case of donation of shares, the donor has the possibility to transmit to the donee a guarantee of liabilities from which he was able to benefit under the terms of the initial deed of acquisition. This transmission is possible even if the initial act did not provide for this possibility.

Once the donation has been made, the parties must generally declare the transaction with the competent land registration and publicity service (SPFE) (tax registration formality), and pay any payments registration fees (also called donation or transfer rights).

Report the transfer to the tax authorities

The formalities may vary depending on the form of the donation

Donation established by an act
Notarial deed

Where the gift has been established by an authentic instrument, its tax registration shall be carried out directly by the notary to the competent tax authorities (registration tax department or land advertising and registration service).

It is also on this occasion that the notary pays the donation fees (if any) on behalf of his clients.

Deed under private seal

When the donation has been recorded by a private deed, it must be registered with the Land Advertising and Registration Service (SPFE) attached to the domicile of the donor or donee.

This formality consists in depositing, on the spot or by mail, the deed of donation (in 2 copies) accompanied by the payment of any donation fees (by check or transfer) within a period of1 month from the donation.

Who shall I contact

FYI  

In principle, registration fees are charged to the donee. However, the parties may agree on another allocation, in particular by providing that the fees shall be borne by the donor or distributed among them.

Donation not recognized by an act (manual donation)

If it is a manual donation of actions, the donee must declare the donation received within the1 month from the donation.

This formality can be carried out either online, or by a paper deposit with the competent Land Advertising and Registration Service (SPFE).

Formality done online

Online and dematerialized registration is carried out via the public finance area of the donee, under the heading « Declare ».

Taxes: access your Public Finance area

The administration shall detail this formality in a instructions for use accessible online.

Filing of the paper file

The application can also be submitted directly to the Land Advertising and Registration Service (SPFE) attached to the domicile of the donee.

Who shall I contact

Two registration methods are possible:

  • Either by means of Form No. 2735 accompanied by the payment of any duties,

Declaration of manual donation and donation of money

  • Either, where the donee is liable for donation rights and that it wishes to defer paymentby means of Form No 2734.
    This approach is open for manual donations of a value greater than €15,000.

Revealing a manual donation worth more than €15,000

Pay registration fees (donation fees)

The tax administration collects a tax when a donation is made: these are the registration fees (also called donation rights or free transfer tax).

Donation fees are in principle due by the beneficiary of the donation (the donee). However, the donor has the option to take them at his expense, without this additional advantage being considered for tax purposes as a gift.

The amount of these donation rights is determined by different parameters:

  1. Value of the donation
  2. Amount of contingent liabilities abatements to be deducted
  3. Tax rate of the donation

The amount of the allowance and the tax rate vary depending on the relationship between the donor and the donee. The tax rate also varies depending on the amount given.

Example :

A partner wishes to give his son shares for a total value of €320,000.

In this situation:

  • The abatement of €100,000 applies. The taxable amount is therefore reduced to 320 000 - €100,000 = €220,000.
  • The tax rate shall be 20%.

The transfer duties therefore amount to 20% from €220,000, or €44,000.

Additional discounts may apply in 2 special cases :

Dutreil Pact

The transmission of family companies is facilitated by the Dutreil system, which entitles the partial exemption donation rights, up to 75% the value of the securities transferred.

In other words, only a quarter (25%) of the value of the company will be taken into account in calculating the amount of donation rights.

A Dutreil Pact may be concluded when the 4 cumulative conditions the following are combined:

  • Conclusion with one or more partners of a collective commitment to conservation securities, for a period of at least 2 years. We are talking about commitment unilateral of conservation when taken by a single partner. This commitment must be in progress at the date of transmission. In addition, it must cover at least 17% financial rights and 34% voting rights of the business.
  • Each beneficiary of the donation commits individually to keep the securities transmitted during 6 years. This period shall start to run from the date of expiry of the conservation commitment made by the donor.
  • One of the beneficiaries or one of the partners signing the conservation commitment (collective or unilateral) must practice in the business and for 3 years sound main activity (or a function of leader in the case of a business submittedIS: titleContent). This period shall start to run from the date of expiry of the conservation commitment made by the donor.
  • The company exercises a industrial, commercial, craft, liberal or agricultural activity. This condition must be met from the conclusion of the 2-year collective conservation commitment until the end of the 4-year individual conservation commitment by each of the beneficiaries.

The Dutreil device also benefits businesses holding animators whose main activity is active participation in the conduct of their group’s policy. On the other hand, companies that have as their object the management of movable or immovable assets (for example, SCI) are excluded of the device.

Please note

This advantage is combined with the legal allowance to which the recipient of the donation is entitled (the amount of this allowance depends on his relationship with the donor).

Early transmission

Where the donor has under 70 at the time of transmission, an additional reduction of 50% a transfer tax applies on the taxable portion of the gift. The application of this reduction is however only possible if the donee undertakes to keep a number of shares for a period of at least 2 years.

Example :

A 67-year-old partner wishes to give his son corporate titles for a total value of €320,000.

In this situation:

  • The abatement of €100,000 applies. The taxable amount is therefore reduced to 320 000 - €100,000 = €220,000.
  • The tax rate being fixed, in that situation, at 20%, transfer duties shall be €44,000 ( 20% from €220,000).

With the application of the reduction of 50%therefore, the fee payable is the sum of €22,000.

This reduction can be combined with any reductions and the benefits of the Dutreil Pact.

The donation of shares of a SA becomes enforceable against the business by its entry in the securities movement register and the updating individual accounts of associates.

1Record the transfer in the securities movement register

The business must note the realization of the donation in its securities movement register.

This registration makes it possible to materialize the transfer of ownership of the shares between the donor and the donee, and allows the business to identify its new partner.

The register shall in particular mention:

  • the date of the donation
  • the identity of the parties
  • the number of shares transferred
  • the nature of the transaction (donation)
  • the references of the actions concerned

2Maintain individual accounts of associates

Following the recording of the movement of securities, the business shall proceed to the updating of individual shareholder accounts.

The donated shares are withdrawn from the donor's account and entered in the donee's account. The latter is then recognized by the business as the holder of the shares received.

Please note

The donation becomes enforceable against the business as from the recording of the transfer in the accounts of shareholders, recorded in the records of the business.

The donation of shares of a SA does not systematically lead to an amendment of the articles of association.

The statutes must be modified where:

  • The article on the distribution of share capital mentions the identity of the partners and/or the number of shares held by each : the clause then becomes inaccurate following the donation and must be updated.
  • One other decision leading to an amendment of the statutes is taken at the time of the donation (for example, a change of corporate name, registered office or corporate object).

The statutes do not need to be modified where:

  • The article on the distribution of share capital does not mention the identity of the partners or the number of shares held by each : the donation then has no impact on the statutes.
  • The only mention of the names of the partners is in other parts of the statutes, such as the preamble or the signatures of the articles of incorporation. These mentions do not need to be updated solely because of the donation.

If the statutes of the SA need to be changed following the donation, the 3 next steps :

1Consult and vote the partners

In order to proceed with the amendment of the articles of association, the decision must be taken by the members meeting in general meeting.

The meeting must first be convened by the president of the business.

Once the meeting is regularly convened, the decision to amend the statutes must be adopted according to the majority rules provided for by law or by the statutes.

In a public limited company (SA), the decision to amend the articles of association must be voted on and approved by the shareholders meeting in an extraordinary general meeting (AGM).

  • At the first meeting, we must 1/4 of voting rights (1 vote = 1 share) present or represented and one majority of 2/3 of shareholders' votes present or represented.
  • If the 1re convocation is unsuccessful, there is a second summons : it is necessary 1/5 of voting rights (1 vote = 1 share) present or represented and one majority of 2/3 of shareholders' votes present or represented.

Example :

In a business of 10 shareholders, 3 are present or represented at the first meeting, either 30% voting rights. The quorum of 1/4 having been reached, the assembly may validly deliberate. The resolution is adopted if it receives at least 2/3 of the votes of the shareholders present.

If the first meeting fails, a second meeting may be held with a quorum reduced to 1/5 of the voting rights, the majority remaining fixed at 2/3 of the votes cast.

Please note

For more information, see our factsheet on the decision-making in a SA.

2Write the minutes of decision

The decision to amend the statutes of a SA must be established in a minutes of general meeting. These minutes are then kept in the register of minutes of the business.

The content and procedures for drawing up the minutes shall be determined by the statutes of the SA. However, the latter must generally include the following information :

  • Date and place of meeting
  • Terms of convening
  • Agenda
  • Identity of the session chair
  • List of partners present or represented with the number of shares held by each
  • Documents and reports submitted to the Assembly
  • Summary of the discussions
  • Text of resolutions put to the vote (subjects on which decisions are to be taken)
  • Detailed results of votes
  • Mention of the articles of association concerned by the amendment and indication of their new wording

3Update statuses

Once the decision to amend the statutes has been adopted, the statuses must be updated to take account of the new distribution of shares among shareholders.

It is appropriate to amend the article of the articles of association relating to the allocation of shares in order to indicate the identity of the shareholders after the donation and the number of shares held by each.

Please note

The donation of shares does not change the amount of the share capital. Only the distribution of actions among associates is updated.

Once the changes have been made, the updated statuses must be dated and certified as true to the original by the legal representative of the business. The statutes must then be sent as part of the declaration formality to the companies' formalities desk.

At the end of the donation, the business must complete the required formalities according to the changes made: publication of a notice in a medium authorized to receive legal notices where necessary, declaration on the formalities window companies in the event of a change to be declared and updating of beneficial owners where the donation entails a change in the latter.

1Publish a legal ad in a legal ad medium, if necessary

The donation of shares does not in itself require publication of a legal advertisement in a legal advertisement medium (Shal).

On the other hand, legal notice is required when the transaction is accompanied by an amendment to the articles of association subject to publication, such as a change of president, one change of corporate purpose or any other statutory amendment to be publicized. The notice is then published in a Shal: titleContent of the department of head office of the business.

Publication must be carried out within a period ofone month from the time the decision is taken.

The notice of publication shall contain the following items :

  • Reason or corporate name
  • Legal form
  • Share capital
  • Social object
  • Address of head office
  • Location and registration number at RCS: titleContent or at RNE: titleContent
  • Decision or minutes of the general meeting dated and signed
  • Description of the changes in the company's statutes subject to disclosure (e.g. change of chairman, change of corporate object or corporate name). The donation of shares, in itself, does not have to be mentioned in the legal announcement.

FYI  

Once the publication is completed, a certificate of publication the notice of amendment shall be issued. This is one of the documents to be sent to the companies' formalities desk in the amendment file.

2Declare the donation at the formalities desk, if necessary

The donation of securities does not in itself entail the filing of an amendment file at the company formalities desk, unless the articles of association, in particular the article on the distribution of shares, mention the identity of the members and/or the number of shares held.

Similarly, where it is accompanied by an amendment to be declared (for example, a change in the articles, a change in the officer or any other change subject to declaration), an amendment file must be deposited on the company formalities desk within one month.

Window of company formalities

Depending on the nature of the changes declared, the amendment file shall include following supporting documents :

  • Copy of the minutes of the meeting which decided to amend the statutes
  • Copy of the articles of association updated when they have been modified (for example, if the distribution of shares is included in the articles of association) dated and certified as true to the original by the legal representative
  • Certification of publication of the notice in a Legal Advertising Support (Shal), if necessary
  • Change declaration automatically generated on the company formalities window
  • Any other supporting documentation required in relation to the additional statutory amendment declared.

Warning  

In a SA, the partners are not listed on the registration document (extract RNE: titleContent or extract Kbis). Consequently, a change of partners does not, in itself, result in the updating of the registration certificate.

However, a new extract may be issued if other changes are declared simultaneously, such as a change of leader or updating the address of the president, for example.

3Declare the beneficial owners

The donation of shares usually involves a change in the actual beneficiaries of the business. In this case, a amending declaration of beneficial owners must be deposited at the companies' formalities desk.

This declaration is mandatory when a natural person acquires or loses control of the business, or when his holding percentage exceeds the threshold of 25% capital or voting rights.

That is the case if the holding percentage changes :

Example :

Before the donation, Mr. X holds 20% and Ms Y 80%. After the donation of shares, Mr. X holds 30% and Ms Y 70%.

The beneficial ownership statement needs to be updated as Mr. X's percentage of ownership has evolved and it is becoming beneficial owner.

A declaration of beneficial ownership may also be required when the holding percentages remain the same, but the persons holding the shares change :

Example :

Before the donation, Ms. Y holds 70% of capital and Mr X 30%. Ms Y gives all her shares to Mr Z, who now holds 70%, while Mr X retains 30%.

The beneficial ownership statement needs to be updated to replace Ms. Y with Mr. Z, without changing the ownership percentages.